Novartis (NVS - Get Report)  Tuesday gave more details about its global commercialization agreement with Amgen (AMGN - Get Report) for erenumab, a migraine prevention drug currently in the final rounds of clinical trials.

Tuesday's agreement expands a 2015 collaboration between the two companies. Amgen shares rose $1.83 to $164.97 through mid-afternoon trading Tuesday. Novartis shares were up $1.69 to $76.30.

Amgen reports earnings Wednesday afternoon.

Novartis and Amgen will co-commercialize erenumab, also known as AMG 334, in the U.S. Novartis will retain exclusive rights to commercialize the drug in the rest of the world and will gain commercialization rights in Canada. Amgen retains exclusive commercialization rights in Japan.

Erenumab is a fully human monoclonal antibody specifically designed for the prevention of migraine and targets and blocks the Calcitonin Gene-Related Peptide (CGRP) receptor, believed to play a critical role in mediating the incapacitating pain of a migraine.

Positive results from a Phase II study and two Phase III studies were announced in 2016. The studies showed erenumab "significantly" reduced monthly migraine days versus placebo and demonstrated a safety profile comparable to placebo, according to the companies.

Detailed results from the Phase III studies are being presented at the annual meeting of the American Academy of Neurology, which is currently underway, and submitted for publication. The companies said they will use the data to support discussions with regulatory agencies, with filing anticipated in the second quarter of 2017.

"We look forward to combining capabilities and leveraging our strong heritage in neuroscience in the U.S. and Canada to bring erenumab to more patients in need, as fast as we can," said Paul Hudson, Novartis Pharmaceuticals' CEO. 

Previously Credit Suisse has suggested sales of erenumab could top out at $2.3 billion. Barclays Capital predicted less success due to competition from other CGRP drugs expected to come on the market soon after erenumab. Barclays predicts a market share of 20% to 25% and peak sales of $800 million.

Under the terms of the agreement, Amgen will receive milestone payments from Novartis, expected to begin in 2017.

Novartis will share U.S. commercialization costs with Amgen. Amgen will book sales of erenumab in the U.S., and pay a royalty to Novartis on net sales there. Novartis will book sales in rest of the world, excluding Japan, and will pay Amgen royalties on the net sales in those countries. Amgen will book sales in Japan, since it will remain an exclusive territory for the company. Novartis will assume agreed upon remaining global development costs up to a cap and share global development costs thereafter.

The agreement is an expansion of a global collaboration with Amgen announced in August 2015 in neuroscience, involving joint development and commercialization of pioneering treatments in the field of Alzheimer's disease and migraine

Competing drugs are expected soon from Eli Lilly (LLY - Get Report) and somewhat later from Teva (TEVA - Get Report) and Alder Biopharmaceuticals (ALDR) . Allergan (AGN - Get Report) also has a CGRP drug, purchased from Merck last year for $250 million.

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